Aussie market delivered another negative day with weaker global markets and commodities. The market made a mid-day recovery but the comments from RBA governor regarding inflation target and property bubble worries pulled the market back down. We finished below the 5300 psychological level while currency is now below 72 cents. We are in the “Sell in May and Go Away” period for the US market and volatility index is pointing to profit taking. We have been telling investors to take profit since early May when the market reached above 5300 as the multiples were not supported by the yield premium or the growth outlook. There are more RBA speeches later this week, but the key will be US Fed Chair Janet Yellen’s speech on Friday. As we have been warning clients since early May > Market has already peaked in the current cycle…nearly 2 weeks ago…we are at the early stages of the May sell off….no need to panic, take advantage of it!!! (VIEW LINK)
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